WELLINGTON, June 24 (Reuters) - New Zealand equipment hire firm Hirepool Ltd has scrapped plans for the country’s second biggest initial public offer this year amid reports that institutional investors were unwilling to pay the asking price.
The company’s major shareholders had decided not to proceed with the IPO, announced a week ago, which had aimed to raise between NZ$175 million ($151.6 million) and NZ$262 million ($226.9 million) in new shares and the sale of existing shares.
“Given the strength of the New Zealand economy and the positive outlook for Hirepool, Next Capital Pty Limited on behalf of the Next Capital Funds, have determined that they are comfortable retaining control of the Hirepool business,” it said in a brief statement on Tuesday.
The company, which rents out a wide range of equipment for home maintenance, construction projects, and social functions, had been due to finalise the offer today through a bookbuild, with an indicative price of $1.10 and NZ$1.50 each.
Media reports had said institutional investors were baulking at the asking price, but the shareholders made no comment on the response from potential institutional shareholders.
The IPO planned to offer up to 120.1 million new shares, with existing shareholders selling up to 83.5 million shares, with the proceeds to be used in part to reduce debt, and increase its stake in a part-owned subsidiary .
It would have been the country’s second biggest share sale this year after the government sold down a 49 percent stake in power company Genesis Energy Ltd for NZ$733 million in April.
Hirepool, which has 58 branches around New Zealand, is owned by private investors and private equity firm Next Capital. After the IPO, they would have held between 20 percent and 35 percent.
The IPO was the fifth announced in less than a month, most of which have been small technology firms tapping the market to fund expansion. ($1 = 1.1546 New Zealand dollars) (Reporting by Gyles Beckford, editing by G Crosse)